The Myths and Realities of Work Force Training and Education

By Mary Bresnahan
the Bresnahan Group

Ah yes, the good-old conundrum of education/training... Should I do it? Is it going to have pay-offs? If I spend the money, will the people still leave? What do I need to do to still be competitive without spending too much money? Will training help me be competitive and maintain market share, or is the magic only in pricing and what my customer (like the auto industry) dictates?

Important Factors

What are some of the known factors to consider in this conundrum?

There is a diminishing workforce due to smaller population of generations (Generation X, 1965-77, and Generation Y, 1977-'97) following the baby boomers.
The workplace is changing due to the way the younger generations wish to work ¾ more independence and involvement in decision making.
There are fewer people and places from which to "steal" employees. And if I steal them, I am just hurting myself by raising the market price for labor.
More global competition. For a lower wage I can afford the cost of transportation, and other cultures don't have a stigma attached to manufacturing.
The continuing cut throat tactics of some customers who are trying to decrease their costs to save their lives. This lowers your margin of profit.
Not enough high school and/or college graduates who know about the industry. Their interest is in technology. What can you offer them?
A lack of dedication to the career because the younger generation hasn't been challenged yet.
Some current springmakers who are fearful of sharing their knowledge.
The older (baby boomer) workers are beginning to retire and take their knowledge with them.
A more mobile society. I can train someone in the Midwest and they may relocate to the Sunbelt.
Equipment is expensive, so how can I justify spending more on training when I am not sure about my Return On Investment (ROI).

Considering many of these factors, how can you not spend time and money on training and marketing your industry!

What's the Risk?

Yes, you always run the risk of loosing an employee you trained to a competitor. But have you ever considered that you may loose someone with a great deal of potential because you haven't trained him or her? The trainee is probably looking for some kind of career path and future. He sees nothing, so he leaves. From the human-resource point of view, it costs at least one-and-a-half times the salary of your separated employee to replace him. So does this mean that you are losing twice-one, by loosing the potential; and two, by losing the physical person?

Yes, there's a risk to hiring and training employees, but the same holds true when you buy a new machine. Although you may feel you have more control over a machine, as an inanimate object, than a person, you actually don't. In both cases you are gambling on their potential. When you buy a machine, you must do your part to ensure a successful return on investment, such as continuing to sell jobs to run on it and having operators that can use it to full advantage. The same is true when you invest in a person. When you hire and train someone, you must do your part to ensure success. This includes having a positive work environment, good management and proper hiring techniques.

From another angle, can you afford not to train someone and instead face the following?

Increased scrap and rework because he doesn't set up a job properly or doesn't do the quality checks required, especially when putting a new coil of wire on the job.
Slower setups because he is struggling, thereby increasing your cycle time.
He is unfamiliar with the capabilities of the machine. What good is a high-speed machine when the operator can't use it to its potential?
The machine is set up for a particular long-running job, so not to worry. But what happens if you lose the job or changes need to be made to the setup, and you have no one capable of doing that. Or better yet, what if that person is out on vacation or sick. (Then you fall behind in production.)

Embracing Change

I have found over the last four-and-a-half years that I have been in business for myself, that the spring industry is not unlike many others. There are always some companies on the cutting edge and those that lag behind, comfortable in their ways and slow to change. Some shut down or are sold.

There is always a variety of reasons for this. It appears that, for many, it is the lack of vision and long-range planning. Yes, attention has to be given to the production of product, but it is also the responsibility of the owner/president to keep his vision clear and communicate it frequently to his staff. The top person must spend time working on his business not in his business."

It has proved true time and time again. When the commitment exists at the top of the organization, whatever the focus is, it will happen. If that top person doesn't want something to happen or isn't interested, it won't. Things still push down from the top, not from the bottom up.

All the experts remind us that we are moving from an industrial-based economy to a knowledge-based economy. Haven't you all been saying for years that the "kids" only want to work on computers? Look at the new equipment you are buying. It is computer-driven. Yes, the good old mechanical machines are still around and used. And they will continue to fill some needs. Yes, it is good to know how these work so you can do a better job on a new computerized machine. But the reality is that, because of lower price demands, shortage of staff and so on. the computerized equipment is a must and here to stay.

Things are changing just as they did when we moved from an agrarian society to an industrial society. It took less than seven years for 30 percent of Americans to embrace the Internet, while it took 13 years for PCs and 17 years for televisions and 38 years for phones. As you can see, change keeps coming faster. I'm sure you have even embraced some of this new technology. Like a computer on the shop floor!! These facts are here to stay and the sooner you get on board, the better off you and your business will be.

Global competition will grow from $4 trillion in 1995 to more than $21 trillion in 2000. In addition to changes in general business, the demographics of the labor force are changing. According to the Bureau of Labor Statistics, the U.S. work force will grow 40 percent for Asian Americans, 37 percent for Hispanics, 20percent for blacks, and 10 percent for whites between 1998 and 2008. Generation Y (born between 1977 and 1997) will make up 30 percent of the population and have an enormous impact on the workplace. Also keep in mind that many of the baby boomers will be looking to work beyond age 65, or they may leave and then return as part-time workers.

Training Facts

Research done by the American Society of Training & Development (ASTD) holds some interesting facts you may find of use.

The war on talent will be a bottom-line issue in the knowledge-based economy.
Seventy percent of the CEOs in Fortune 1000 companies state that the lack of trained employees is the biggest barrier to sustaining growth. You may not be in this group, but you have to compete with large companies for trainable employees.
The largest sector for growth is health care, followed by education. This is directed toward the concept of learning from the cradle to the grave. (The 45- to 50-year age bracket accounts for the highest volume of enrollees in the community-college system.) These are the areas in which investors are putting their money.
Investment leaders in training ranked in the 90th percentile in expenditures, hours, percent of employees trained and use of technology.
Even though the investment leaders did some belt tightening, they still spent 3.5 percent of payroll on training. Other benchmarked companies went from two percent in 1998 to 1.5 percent in 1999.
The fastest-growing segment for training is small to mid-sized companies. (They are your competitors for that diminished workforce.)
Information-technology training is still at the top of the charts. Number two for training is the professional-skill category. This includes management/supervisory, new-employee orientation, customer relations, interpersonal communications and so on.

The financial pay-off in performance for companies that invest $1,595 per employee in training is:

24% higher gross-profit margins
218% higher income per employee
26% higher price-to-book ratios

Training provides a definite link to retention. It helps provide more loyal and satisfied employees. Therefore it can, and should, be used as a recruitment tool.

Learning on the Internet, or "e-learning," is something that is here to stay and will continue to grow. There are significant development costs, but some of the positives, such as reaching a widely scattered audience, are money savers. The learning trend for the future is called "blended learning," which combines the Internet and classroom training. People still like the social aspects of classroom training. Companies who have used blended training have found a 57 percent improvement in employee skills.

What does all of this mean? You can draw your own conclusions, but there is one certainty: Things are changing from what we have known in the past. Success is hooked to knowledge and learning for all of us. This can mean new management approaches and performance measures. It means accounting for the intellectual assets and how these can improve performance. You know that another company doesn't want to steal one of your top people because he is a nice guy. It is because of what he knows.

Planning for the Future

The key to finding a good springmaker is still curiosity. In today's competitive, global economy with a smaller work force that has different work standards than existed years ago, it is time to take a serious look at the way to attract and cultivate your people. How do you spark the curiosity in future generations?

Many people in our society are reactive and not proactive. I know you have heard this before: The process of employee recruitment, training, and retention is long-term, but it has to start sometime, somewhere. Here are some suggestions.

Start marketing your industry in your community. Parents, teachers and students aren't going to come looking for you. Also, they won't be interested in something they know nothing about.
Send your people out as ambassadors for you and the industry whenever possible.
Establish a career path in your company. We all want to know where we are going and how we will get there. Include knowledge and compensation growth.
Setup a training program. You can model it after other apprenticeships. It is imperative that all senior management supports a program. This might mean a shifting of some responsibilities (which can also lead to the grooming and growth of another person).
Use the SMI materials (SMI University Coiler Setup Training, SMI/PMA Slide Forming Machine Operator & Setup Training System) for the basics.
Choose a trainer. Give him the training (skills) needed to be a good trainer.
Make sure the program has some structure with a beginning and an end.
Check the progress, and celebrate milestones
Market the training program internally, and communicate information about it regularly and frequently. Use your company newsletter, put up banners and announcements, and so on.

There are plenty of people you know who have been successful with their internal training programs over the years. Springmakers are among the best! Years ago, we could do and keep business within our shores but no more. We are a global economy and must consider that as a part of the equation. Our plants are diversified and will continue to be. Communication and transfer of knowledge is critical to the successful plan. Many of you have much work to do. It's time to get started. Good luck!!

Mary Bresnahan, president of the Bresnahan Group specializing in providing business solutions to people issues. The focus is primarily on training and assisting companies with human resource projects. Bresnahan has written several articles for Springs, Cast Metal and The Fabricator. She is part of the adjunct faculty for Waubonsee Community College and National-Louis University. She holds a bachelor's degree in Education and a master's degree in Organization Development.

The Bresnahan Group has experience in all levels of training, including on-the-job training, team building, problem solving, employee-involvement programs, skill standards, interviewing, employee relations and the law in regards to human-relations issues. Bresnahan was instrumental in the design, development and implementation of SMI University Coiler Training Program. She has worked in a variety of industries, including financial, telecommunications, manufacturing. Readers may contact her at the Bresnahan Group by phone at 505-922-1973 or e-mail at BresGroup @ 4u.net.

This article appeared in the June 2001, Springs.

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